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Bourbonnais Tax Associates LLC Bourbonnais Tax Associates LLC—Your Real Estate Tax Pros. We specialize in tax strategies that maximize savings for investors, flippers, and agents.

Keep more of what you earn with expert planning built for real estate professionals.

10/15/2026

𝗧𝗵𝗿𝗲𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆: 𝗔 𝗻𝗼𝘁𝗲 𝗳𝗿𝗼𝗺 𝘆𝗼𝘂𝗿 𝘁𝗮𝘅 𝗽𝗿𝗼

𝗜𝘁’𝘀 𝗢𝗰𝘁𝗼𝗯𝗲𝗿 𝟭𝟱𝘁𝗵. One of the most stressful and longest days in most tax professionals’ lives.

A short 𝗧𝗵𝗿𝗲𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆 on what to know about your tax pro today.

𝗧𝗵𝗶𝗻𝗴 𝟭: Most of us love what we do, except for the hard-coded deadline dates, when we seriously doubt our life choices, our stress levels spike, and our patience wears thin.

𝗧𝗵𝗶𝗻𝗴 𝟮: Even after the clock strikes midnight on the 15th, we don’t get to relax and enjoy life. Returns we transmit to the tax agencies can still get rejected. And in almost every rejection, if the federal return rejects, all the associated state returns reject right along with it. We have to research the reason, figure out the fix, and retransmit, within 5 days of the rejection notice for returns filed on the deadline.

Sometimes it’s an easy fix: transposed numbers in an EIN or SSN, a wrong year on a birthday, a misspelled last name, or you got married but didn’t update your name with Social Security yet. If it’s a material change, we may need new signatures from you. But that 5-day window doesn’t move.

𝗧𝗵𝗶𝗻𝗴 𝟯: We’re at the mercy of technology. Internet failures. Systems overloaded by the sheer number of returns being filed. When I started in tax back in 1994, electronic filing was in its infancy and e-signatures weren’t even authorized by the IRS, everything was signed by hand, in person. One technical glitch at 11:30pm can wreak havoc.

𝗕𝗼𝗻𝘂𝘀 𝗧𝗵𝗶𝗻𝗴 𝟰: There’s no busy season. There’s a busy year, with multiple “hell weeks.” When we’re not doing taxes, we’re learning about taxes. When we’re not learning about taxes, we’re evaluating software and technology. And we’re always maintaining our compliance requirements with the IRS and state agencies, licensing, annual e-file renewal, PTIN renewal, client representation authorizations.

Yes, we usually love what we do. But maybe not so much today. 🙂

Cheer$

𝗪𝗵𝗮𝘁 𝗜𝘀 𝗬𝗼𝘂𝗿 𝗧𝗮𝘅 𝗣𝗿𝗼, 𝗥𝗲𝗮𝗹𝗹𝘆?𝘛𝘩𝘳𝘦𝘦 𝘛𝘩𝘪𝘯𝘨𝘴 𝘛𝘩𝘶𝘳𝘴𝘥𝘢𝘺In everyday shorthand, people call any tax professional their “CPA.” B...
10/08/2026

𝗪𝗵𝗮𝘁 𝗜𝘀 𝗬𝗼𝘂𝗿 𝗧𝗮𝘅 𝗣𝗿𝗼, 𝗥𝗲𝗮𝗹𝗹𝘆?
𝘛𝘩𝘳𝘦𝘦 𝘛𝘩𝘪𝘯𝘨𝘴 𝘛𝘩𝘶𝘳𝘴𝘥𝘢𝘺

In everyday shorthand, people call any tax professional their “CPA.” But Certified Public Accountant is a specific, state-issued license, and most tax professionals are not CPAs. Some have no formal credential at all. This week’s 𝗧𝗵𝗿𝗲𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆 is about knowing who you are actually hiring.

𝗧𝗵𝗶𝗻𝗴 𝟭: There is no national requirement that a tax preparer hold any license, credential, or training. In most of the country, a person can start charging to prepare your return with no test and no credential. As the National Association of Enrolled Agents once put it, in most states the bar to become a barber is higher than the bar to prepare someone’s taxes. The IRS tried to require basic testing; the courts struck it down in a case called Loving. Only a handful of states fill the gap, mainly California, Oregon, Maryland, and New York.

𝗧𝗵𝗶𝗻𝗴 𝟮: The IRS offers a voluntary designation, not a license, for preparers with no credential. It’s the Annual Filing Season Program (AFSP). Preparers who opt in complete annual education and get a Record of Completion. It is a good sign, but it is not a license, and it carries only limited rights to represent you, generally just on returns they prepared.

𝗧𝗵𝗶𝗻𝗴 𝟯: Enrolled Agent, CPA, and Attorney are the only credentials the IRS recognizes for unlimited representation rights. CPAs and Attorneys are licensed by their states, both serious credentials, and either may or may not involve tax at all, so a CPA is not automatically a tax professional. The Enrolled Agent is different in kind: licensed federally by the IRS itself, and specific to tax. Tax is the whole license. An EA is a federally licensed tax specialist, built for exactly this.

The credential is not the whole story, plenty of uncredentialed preparers are excellent, but it does tell you your rights if the IRS comes calling. Before you hand over your financial life, ask what your preparer actually is. Proud Enrolled Agent since 1997.

Full write-up on the blog: https://buff.ly/BAx2rhp

𝗔𝘃𝗼𝗶𝗱 𝗔𝗽𝗿𝗶𝗹 𝗥𝗲𝗴𝗿𝗲𝘁: 𝗜𝘁’𝘀 𝗣𝗹𝗮𝗻𝗻𝗶𝗻𝗴 𝗦𝗲𝗮𝘀𝗼𝗻𝑻𝒉𝒓𝒆𝒆 𝑻𝒉𝒊𝒏𝒈𝒔 𝑻𝒉𝒖𝒓𝒔𝒅𝒂𝒚 When I do presentations for business owners and real estat...
10/01/2026

𝗔𝘃𝗼𝗶𝗱 𝗔𝗽𝗿𝗶𝗹 𝗥𝗲𝗴𝗿𝗲𝘁: 𝗜𝘁’𝘀 𝗣𝗹𝗮𝗻𝗻𝗶𝗻𝗴 𝗦𝗲𝗮𝘀𝗼𝗻
𝑻𝒉𝒓𝒆𝒆 𝑻𝒉𝒊𝒏𝒈𝒔 𝑻𝒉𝒖𝒓𝒔𝒅𝒂𝒚

When I do presentations for business owners and real estate investors, I like to open with two questions. How many of you went on a vacation this year? And did you plan it, or just get in the car and start driving whichever way it was pointed?

Almost everyone plans the vacation. Almost no one plans for their biggest expense of all. Tax planning season is now, and the worst day to plan your taxes is April 14th. This week’s Three Things Thursday is about avoiding April regret.

𝗧𝗵𝗶𝗻𝗴 𝟭: When the ball drops at midnight, all bets are off. Almost every tax move has a hard deadline. A few survive past New Year’s, like IRAs, SEP-IRAs, and HSAs. But in most cases, if it was not done in time, the savings do not magically appear. Knowing WHEN to act is as important as knowing WHAT to do.

𝗧𝗵𝗶𝗻𝗴 𝟮: Dropping $100,000 on an SUV your business does not need is not a tax strategy. It’s ego with a cost. One of a dealership’s busiest days every year is December 31st, when owners rush in for the big depreciation write off. But cash is king. When you pull $100,000 out of your cash bag for a truck you may not even need, you trade $100,000 of cash for a $20,000 to $30,000 tax savings. You are still $70k to $80k in the hole. Unless you need the truck just as much on December 1st or January 10th as on December 31st, keep the cash.

𝗧𝗵𝗶𝗻𝗴 𝟯: There is Strategy, and there is Tactics. You need both, year-round. Strategy is the long-term plan and why it matters. Tactics are the steps that execute it. Without the strategy, you do not know where your tactics are taking you. That is our mantra: 𝙎𝙩𝙧𝙖𝙩𝙚𝙜𝙮 𝘽𝙚𝙛𝙤𝙧𝙚 𝙩𝙝𝙚 𝙍𝙚𝙩𝙪𝙧𝙣. Your return is just the report card of the planning you did, or didn’t do.

It’s October 1st. There are 92 planning days left this year, and they go fast. Don’t wait.

Full write-up on the blog: https://buff.ly/kvo94IJ

𝗦𝗵𝗮𝘃𝗲 𝗮𝗻𝗱 𝗮 𝗵𝗮𝗶𝗿𝗰𝘂𝘁: 𝘁𝘄𝗼 𝗻𝗲𝘄 𝗰𝘂𝘁𝘀 𝗼𝗻 𝘆𝗼𝘂𝗿 𝗰𝗵𝗮𝗿𝗶𝘁𝗮𝗯𝗹𝗲 𝗱𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻 𝗧𝗵𝗿𝗲𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆 𝗘𝗽𝗶𝘀𝗼𝗱𝗲 𝟮𝟱If you give to charity an...
09/24/2026

𝗦𝗵𝗮𝘃𝗲 𝗮𝗻𝗱 𝗮 𝗵𝗮𝗶𝗿𝗰𝘂𝘁: 𝘁𝘄𝗼 𝗻𝗲𝘄 𝗰𝘂𝘁𝘀 𝗼𝗻 𝘆𝗼𝘂𝗿 𝗰𝗵𝗮𝗿𝗶𝘁𝗮𝗯𝗹𝗲 𝗱𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻
𝗧𝗵𝗿𝗲𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆 𝗘𝗽𝗶𝘀𝗼𝗱𝗲 𝟮𝟱

If you give to charity and you itemize, there is a change coming that a lot of generous people will walk into without warning. Starting with the 2026 tax year, a new law puts two separate cuts on the charitable deduction. They stack. This week’s Three Things Thursday, and the good news is there is still time this year to plan around them.

𝗧𝗵𝗶𝗻𝗴 𝟭: It is a double haircut, and the two cuts hit different people. The first is a floor for everyone who itemizes and gives: you can only deduct your giving above one half of one percent of your income, so the first slice each year no longer counts. The second is a cap that lands only on the top 37% bracket, trimming every itemized deduction so a dollar that saved 37 cents now saves 35, and that one hits mortgage interest and state and local taxes too, not just charity.

𝗧𝗵𝗶𝗻𝗴 𝟮: When and how you give matters more now. Because the floor hits every year, steady annual giving gets nibbled every year. Bunching several years of gifts into one, often through a donor-advised fund, clears the floor once instead of many times. Honest caveat you will not hear in the sales pitch: bunching beats the floor, but it does nothing about the cap.

𝗧𝗵𝗶𝗻𝗴 𝟯: What you give can matter as much as how much. Donate investments that have gone up in value and you have held over a year, and you skip the capital gains tax you would have owed by selling, a benefit neither new cut touches. And if you are 70 and a half or older, giving straight from your IRA sidesteps both cuts, because it never counts as income in the first place.

The rules are in effect now. There is still time before December 31 to put a plan in place for this year.

Full write-up on the blog: https://buff.ly/FMJXSSA

𝗧𝗵𝗿𝗲𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆“𝗪𝗲 𝗚𝗮𝘃𝗲 𝗧𝗵𝗲𝗺 𝗮 𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁. 𝗖𝗮𝗻 𝗪𝗲 𝗪𝗿𝗶𝘁𝗲 𝗜𝘁 𝗢𝗳𝗳?”Here is a real question I'm asked often. “We gave a ...
09/17/2026

𝗧𝗵𝗿𝗲𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆
“𝗪𝗲 𝗚𝗮𝘃𝗲 𝗧𝗵𝗲𝗺 𝗮 𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁. 𝗖𝗮𝗻 𝗪𝗲 𝗪𝗿𝗶𝘁𝗲 𝗜𝘁 𝗢𝗳𝗳?”

Here is a real question I'm asked often. “We gave a 501(c)(3) a discount off the full price on a project, and they sent us a letter confirming the discount. Can we claim that as a donation?”

It is one of the most reasonable-sounding questions in tax. You did something generous, the charity put it in writing, it all feels like a donation. So it surprises people that in a case like this, there usually is no deduction. This week’s Three Things Thursday explains why, and why you may have already gotten your benefit anyway.

𝗧𝗵𝗶𝗻𝗴 𝟭: Giving is good, and some giving is deductible, but the deduction follows the rules, not your generosity. It is a specific benefit with specific requirements, and documentation matters as much as the gift itself.

𝗧𝗵𝗶𝗻𝗴 𝟮: The deduction is tied to what you actually gave up, not the value the charity received. Write a $5,000 check and you gave up $5,000, simple. Donate property and it traces to what it cost you. Either way it starts from something leaving your hands at a real cost to you.

𝗧𝗵𝗶𝗻𝗴 𝟯: A discount or free work feels like a gift, but there is nothing to deduct, because you never took the income. Full price $10,000, you charged $6,000? You did not donate $4,000. You never took that $4,000 into income, and you cannot deduct money you chose not to charge. You report the $6,000 you collected, and that is the whole story. Free services work the same way: no deduction for the value of your time, because you never billed it. And the charity’s letter does not change any of it. Paperwork proves a gift happened, it does not make a non-deductible gift deductible.

The good news: you still got a benefit. By discounting, you are taxed only on the $6,000 you collected, not the $10,000 you could have charged. Same economics as a deduction, it just came through a different door.

Full write-up on the blog: https://buff.ly/FsuURYE

𝗧𝗵𝗿𝗲𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆 - 𝗘𝗽𝗶𝘀𝗼𝗱𝗲 𝟮𝟯𝗬𝗼𝘂 𝗖𝗵𝗮𝗻𝗴𝗲𝗱 𝗟𝗮𝘀𝘁 𝗬𝗲𝗮𝗿’𝘀 𝗕𝗼𝗼𝗸𝘀. 𝗛𝗲𝗿𝗲’𝘀 𝗪𝗵𝗮𝘁 𝗬𝗼𝘂 𝗝𝘂𝘀𝘁 𝗦𝗲𝘁 𝗶𝗻 𝗠𝗼𝘁𝗶𝗼𝗻.Here is a situation ...
09/10/2026

𝗧𝗵𝗿𝗲𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆 - 𝗘𝗽𝗶𝘀𝗼𝗱𝗲 𝟮𝟯
𝗬𝗼𝘂 𝗖𝗵𝗮𝗻𝗴𝗲𝗱 𝗟𝗮𝘀𝘁 𝗬𝗲𝗮𝗿’𝘀 𝗕𝗼𝗼𝗸𝘀. 𝗛𝗲𝗿𝗲’𝘀 𝗪𝗵𝗮𝘁 𝗬𝗼𝘂 𝗝𝘂𝘀𝘁 𝗦𝗲𝘁 𝗶𝗻 𝗠𝗼𝘁𝗶𝗼𝗻.

Here is a situation I run into more and more often. A business owner, or their bookkeeper, reaches back into a prior year that is already closed and changes something. An invoice was missed. Something was in the wrong account. A number looked off and got cleaned up. It feels small, so it gets done quietly and everyone moves on.

The trouble is that a closed year is not a quiet place. This week’s Three Things Thursday is what actually happens when you change a period you have already reported.

𝗧𝗵𝗶𝗻𝗴 𝟭: “Material” is not one thing. Your financial statements judge a change against the size of the whole picture, so a few hundred dollars in a multi-million-dollar company may be immaterial to the statements. That same change can still be material to your tax return, because tax measures things by its own rules. “It was immaterial” is only half an answer until you know immaterial to which system.

𝗧𝗵𝗶𝗻𝗴 𝟮: Once a period is closed, “just fix it” is not a single action. On the tax side it might be an amended return, or a current-year adjustment, or a formal change in accounting method, depending on what changed and when. Reaching straight for an amended return because it feels honest can be the wrong move. And the financial statement side is a separate process, especially if a lender or investor already has the version you are about to change.

𝗧𝗵𝗶𝗻𝗴 𝟯: The change is rarely the problem. The undocumented, unannounced change is. When nobody writes down why, and nobody tells the tax pro, small things turn into big ones. Two habits prevent almost all of it: write down why you made the change when you make it, and tell your tax professional before you make it, not after.

Full write-up on the blog: https://buff.ly/lyqxspK

𝗧𝗵𝗿𝗲𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆 - 𝗘𝗽𝗶𝘀𝗼𝗱𝗲 𝟮𝟮𝗧𝗵𝗲 𝗔𝘂𝗴𝘂𝘀𝘁𝗮 𝗥𝘂𝗹𝗲: 𝗧𝗮𝘅-𝗙𝗿𝗲𝗲 𝗥𝗲𝗻𝘁 𝗜𝘀 𝗥𝗲𝗮𝗹, 𝗕𝘂𝘁 𝗡𝗼𝘁 𝘁𝗵𝗲 𝗪𝗮𝘆 𝗧𝗶𝗸𝗧𝗼𝗸 𝗦𝗮𝘆𝘀You have probably ...
09/03/2026

𝗧𝗵𝗿𝗲𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆 - 𝗘𝗽𝗶𝘀𝗼𝗱𝗲 𝟮𝟮
𝗧𝗵𝗲 𝗔𝘂𝗴𝘂𝘀𝘁𝗮 𝗥𝘂𝗹𝗲: 𝗧𝗮𝘅-𝗙𝗿𝗲𝗲 𝗥𝗲𝗻𝘁 𝗜𝘀 𝗥𝗲𝗮𝗹, 𝗕𝘂𝘁 𝗡𝗼𝘁 𝘁𝗵𝗲 𝗪𝗮𝘆 𝗧𝗶𝗸𝗧𝗼𝗸 𝗦𝗮𝘆𝘀

You have probably seen the video. Some supposed multi-millionaire bought a Ferrari using a tax trick involving his house. That version is nonsense. But underneath it is a strategy that is completely real and in the tax code.

It is the Augusta Rule, this week’s Three Things Thursday.

Section 280A(g) lets you rent your personal residence up to 14 days a year and pay no income tax on the rent. It is named for the homeowners who rent out their houses during the Masters in Augusta, Georgia. Same idea in any Super Bowl or convention city, or LA for the 2028 Olympics.

Three things that separate a real deduction from a costly mess.

𝗧𝗵𝗶𝗻𝗴 𝟭. The real power is renting to your own business for a legitimate meeting, not renting a room to a stranger. But it takes the right entity. A sole proprietor or a single-member LLC cannot do this, because you cannot rent to yourself. You need a partnership, an S corp, a C corp, or an LLC taxed as one.

𝗧𝗵𝗶𝗻𝗴 𝟮. The documentation is the entire strategy. Who attended, what was discussed, minutes of the meeting. If you cannot show a real business event happened, you do not have a deduction, you have a red flag.

𝗧𝗵𝗶𝗻𝗴 𝟯. The rent has to be reasonable and you have to prove it. Get quotes for comparable meeting space and keep them. In Sinopoli v. Commissioner (2023), an S corp paid its owners about $290,900 over three years to rent their homes for meetings. The Tax Court allowed $16,500 and disallowed the other $274,000, because the owners had no independent support for their rate and could not document the meetings in one of the years. It did not reject the strategy. It rejected the sloppiness.

Pigs get fat, hogs get slaughtered.

Full write-up on the blog: https://buff.ly/r8rh5df

🚨 IRS Scam Alert for Cryptocurrency Holders 🚨The IRS is warning taxpayers about fake letters being mailed to cryptocurre...
08/31/2026

🚨 IRS Scam Alert for Cryptocurrency Holders 🚨

The IRS is warning taxpayers about fake letters being mailed to cryptocurrency owners. These letters claim recipients must register for a "Digital Asset Compliance Portal" and often include a QR code that leads to a fraudulent website.

The goal is simple: steal personal information, crypto wallet details, and account credentials.

Remember:
✅ The IRS does NOT operate a Digital Asset Compliance Portal.
✅ Do NOT scan QR codes from unexpected IRS letters.
✅ Never share wallet recovery phrases or private keys.
✅ Verify any IRS communication through official IRS channels.

If you receive one of these letters, ignore it and report it.

Stay alert and protect your digital assets.

Source: https://www.irs.gov/compliance/criminal-investigation/fraud-alert-fake-irs-letters-target-cryptocurrency-holders

𝗟𝗲𝗮𝘀𝗲 𝗼𝗿 𝗕𝘂𝘆? 𝗧𝗵𝗲 𝗔𝗻𝘀𝘄𝗲𝗿 𝗜𝘀𝗻'𝘁 𝗬𝗼𝘂𝗿 𝗠𝗼𝗻𝘁𝗵𝗹𝘆 𝗣𝗮𝘆𝗺𝗲𝗻𝘁. 𝑇ℎ𝑟𝑒𝑒 𝑇ℎ𝑖𝑛𝑔𝑠 𝑇ℎ𝑢𝑟𝑠𝑑𝑎𝑦  |  𝐸𝑝𝑖𝑠𝑜𝑑𝑒 21 First, a caveat: this applies ...
08/27/2026

𝗟𝗲𝗮𝘀𝗲 𝗼𝗿 𝗕𝘂𝘆? 𝗧𝗵𝗲 𝗔𝗻𝘀𝘄𝗲𝗿 𝗜𝘀𝗻'𝘁 𝗬𝗼𝘂𝗿 𝗠𝗼𝗻𝘁𝗵𝗹𝘆 𝗣𝗮𝘆𝗺𝗲𝗻𝘁.
𝑇ℎ𝑟𝑒𝑒 𝑇ℎ𝑖𝑛𝑔𝑠 𝑇ℎ𝑢𝑟𝑠𝑑𝑎𝑦 | 𝐸𝑝𝑖𝑠𝑜𝑑𝑒 21

First, a caveat: this applies to assets used 100% in business. Mixed-use involves different rules. We're not going there today.

Every year I watch business owners make the lease-or-buy decision by telling a salesperson what they want to spend per month. The salesperson engineers a deal around that number. The car dealership invented this technique. It has since spread to equipment dealers and copier reps everywhere.

'𝑊ℎ𝑎𝑡 𝑑𝑜𝑒𝑠 𝑦𝑜𝑢𝑟 𝑏𝑢𝑑𝑔𝑒𝑡 𝑎𝑙𝑙𝑜𝑤 𝑝𝑒𝑟 𝑚𝑜𝑛𝑡ℎ?' is a sales question. It is not a financial analysis.

𝗧𝗵𝗿𝗲𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗧𝗵𝘂𝗿𝘀𝗱𝗮𝘆: 𝗟𝗲𝗮𝘀𝗲 𝗼𝗿 𝗕𝘂𝘆? 𝗧𝗵𝗲 𝗔𝗻𝘀𝘄𝗲𝗿 𝗜𝘀𝗻'𝘁 𝗬𝗼𝘂𝗿 𝗠𝗼𝗻𝘁𝗵𝗹𝘆 𝗣𝗮𝘆𝗺𝗲𝗻𝘁.

𝗧𝗵𝗶𝗻𝗴 𝟭: The payment is not the analysis. A lease is a stream of future payments. A purchase is a lump sum today. Comparing them requires discounting future payments back to present value at your cost of money. Until you run that math, you don't know which option is cheaper. You only know which one feels more manageable. You can engineer a monthly payment to be almost anything — extend the term, adjust the residual, bury costs in fees. The payment amount is the output of a sales process. It is not the output of an analysis.

𝗧𝗵𝗶𝗻𝗴 𝟮: The assumptions drive the outcome, and most people never see them. A client this week needed a copier. Purchase: $11,000, full bonus depreciation in year one. Lease: $340 a month for 36 months, FMV option at the end — essentially no residual. At a 6% cost of money, the pre-tax present value favors the purchase by about $176. After factoring in the client's marginal tax rate, the NPV flips to the lease — by $89. On an $11,000 decision. Less than one percent of the purchase price. And that $89 moves with every assumption. Change the cost of money or the tax rate and the number changes. The analysis isn't a verdict. It's a framework. When the delta is this small, you're not looking at a clear winner.

𝗧𝗵𝗶𝗻𝗴 𝟯: When the margin is small, the tiebreaker is tax timing. An $89 NPV advantage is not a decision driver. At that margin, the question shifts to qualitative factors — and for a business with taxable income this year, the biggest qualitative factor is when you get the deduction. Bonus depreciation pulls the full $11,000 write-off into the current year. Lease payments give you $340 a month for three years. When you have income to absorb a deduction now and uncertainty about next year, that tiebreaker is not close. The copier went to purchase. Not because the NPV said so decisively, but because when it's a coin flip, you take the write-off now.

The lease-or-buy decision is worth fifteen minutes of actual analysis before you sign anything significant.

Bill Bourbonnais, EA, CTC, CTP, CTS | Bourbonnais Tax Associates LLC

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